Since the takeover of Twitter, new owner Elon Musk has wanted to save the group for profit. Despite mass layoffs, this is proving to be an enormously difficult task. But Musk is anything but squeamish about his choice of means.
It is a huge challenge for the new owner: Even before Elon Musk took over the scepter, the group was in the misery despite annual revenues of around five billion euros. Because the new boss transferred some of his 44 billion euros for the takeover to the company as debt, the group now has to make another billion plus – just to be able to repay the interest. He should also be ready to take questionable measures.
This is reported by the “New York Times”, citing eight sources on Twitter. Musk let his team go through the company’s costs “entry by entry” to discover further savings opportunities. Even the expense accounts of individual employees are on the agenda. And that’s where Musk is said to have found what he was looking for.
Save at all costs
The company’s previous management is said to have accumulated hundreds of thousands of dollars in travel expenses over the past several months that had yet to be paid by the expense department. Musk has now prevented that. According to the company, he refuses to pay for the costs he has not approved. He simply refused to pay the travel companies that had already provided their service.
Musk is also said to have blocked contractually agreed payments to suppliers elsewhere. Overall, he is said to have refused to pay bills totaling several million dollars. This is said to have caused protests among the workforce and the companies concerned. It is not yet publicly known whether legal action has been taken.
Homemade money problems
The fact that Musk has to save can hardly be denied given the group’s financial situation. But he caused part of the problem himself. While the group has to shoulder significantly increased costs due to the interest payments, income fell significantly. Because advertisers are very skeptical about Musk’s clear commitment to freedom of expression and a minimum of moderation, many of them have frozen their advertising on Twitter, which means the company is losing important revenue.
At the same time, Musk had to withdraw his hasty introduction of a subscription program for the time being. Musk had planned to replace the verification of individual accounts with a payment system. Shortly after its introduction, however, its vulnerability became apparent: Twitter was almost inundated with accounts posing as companies, celebrities or even Jesus. The program was initially terminated in order to revise it.
Twitter in economy mode
Musk’s austerity measures are already having a noticeable impact on Twitter. Just a week after he took office, Musk had laid off half of the employees worldwide. By ending home office and forcing employees to choose between active commitment to the company or resignation via email, he further reduced the workforce. There are now 2,700 employees, Musk announced in an internal meeting, according to The Verge. Before the takeover there were almost 7500.
Some of the failures are also noticeable on Twitter itself. Users report an increase in insults and problematic tweets. This is certainly not only due to Musk’s declared goal of more freedom of expression, but also to a significantly reduced number of moderators. An increase in copy-protected material is also observed. Users had started to load entire series and films onto the platform. These were either not removed at all or only removed after a long time.
Sources: New York Times, The Verge, T3N
